Evelyn Reynolds

The National Labor Relations Board says the locations were closed because of union organizing, violating federal law.Federal labor regulators accused Starbucks on Wednesday of illegally closing 23 stores to suppress organizing activity and sought to force the company to reopen them.A complaint issued by a regional office of the National Labor Relations Board argued that Starbucks had closed the stores because its employees engaged in union activities or to discourage employees from doing so. At least seven of the 23 stores identified had unionized.The agency’s move is the latest in a series of accusations by federal officials that Starbucks has broken the law during a two-year labor campaign.The case is scheduled to go before an administrative judge next summer unless Starbucks settles it earlier. In addition to asking the judge to order the stores reopened, the complaint wants employees to be compensated for the loss of earnings or benefits and for other costs they incurred as a result of the closures.“This complaint is the latest confirmation of Starbucks’ determination to illegally oppose workers’ organizing,” Mari Cosgrove, a Starbucks employee, said in a statement issued through a spokesperson for the union, Workers United.A Starbucks spokesman said, “Each year as a standard course of business, we evaluate the store portfolio” and typically open, close or alter stores. The company said it opened hundreds of new stores last year and closed more than 100, of which about 3 percent were unionized.The union campaign began in 2021 in the Buffalo, N.Y., area, where two stores unionized that December, before spreading across the country. More than 350 of the company’s roughly 9,300 corporate-owned locations have unionized.The labor board has issued more than 100 complaints covering hundreds of accusations of illegal behavior by Starbucks, including threats or retaliation against workers involved in union activity and a failure to bargain in good faith. Administrative judges have ruled against the company on more than 30 occasions, though the company has appealed those decisions to the full labor board in Washington. Judges have dismissed fewer than five of the complaints.None of the unionized stores have negotiated a labor contract with the company, and bargaining has largely stalled. Last week, Starbucks wrote to Workers United saying it wanted to resume negotiations.According to Wednesday’s complaint, Starbucks managers announced the closing of 16 stores in July 2022, then announced several more closures over the next few months.An administrative judge previously ruled that Starbucks had illegally closed a unionized store in Ithaca, N.Y., and ordered workers reinstated with back pay, but the company has appealed that decision.The new complaint was issued on the same day that Starbucks released a nonconfidential version of an outside assessment of whether its practices align with its stated commitment to labor rights. The company’s shareholders had voted to back the assessment in a nonbinding vote whose results were announced in March.The author of the report, Thomas M. Mackall, a former management-side lawyer and labor relations official at the food and facilities management company Sodexo, wrote that he “found no evidence of an ‘anti-union playbook’ or instructions or training about how to violate U.S. laws.”But Mr. Mackall concluded that Starbucks officials involved in responding to the union campaign did not appear to understand how the company’s Global Human Rights Statement might constrain their response. The rights statement commits Starbucks to respecting employees’ freedom of association and participation in collective bargaining.Mr. Mackall cited managers’ “allegedly unlawful promises and threats” and “allegedly discriminatory or retaliatory discipline and discharge” as areas where Starbucks could improve.In a letter tied to the report’s release, the chair of the company’s board and an independent director said the assessment was clear that “Starbucks has had no intention to deviate from the principles of freedom of association and the right to collective bargaining.” At the same time, the letter added, “there are things the company can, and should, do to improve its stated commitments and its adherence to these important principles.” More

Wholesale prices were flat in November, providing a leading indicator that inflation is easing, the Labor Department reported Wednesday.
The producer price index, which measures a broad range of prices on final demand items, was unchanged for the month, following a 0.4% decrease in October but less than the Dow Jones estimate for a 0.1% gain. On a year-over-year basis, headline PPI accelerated just 0.9%, after peaking above 11.5% in March 2022.

Excluding food and energy, the index also was unchanged against an estimate for a 0.2% increase. Excluding food, energy and trade services, PPI increased 0.1%, posting a sixth straight increase and good for a 12-month gain of 2.5%.
The release comes a day after the Labor Department said its consumer price index rose just 0.1% in November and 3.1% from a year ago. The PPI gauges the prices producers receive for what they produce while CPI measures what consumers pay and is considered a leading signal for prices in the pipeline.
Together, the easing inflation data, along with other economic signals, likely will give the Federal Reserve enough room to hold benchmark interest rates steady when its policy meeting concludes Wednesday.
At the wholesale level, indexes for both goods and services were unchanged, though there were some big swings within components.
Gasoline, for instance, fell 4.1% while chicken eggs soared 58.8%. The index for final demand energy fell 1.2%, offsetting increases of 0.6% for foods and 0.2% for goods less food and energy.

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Surging interest rates and waning financing options threaten a “lost decade” for poor countries.Surging interest rates are saddling the world’s poorest countries with record levels of debt and complicating investments in public health, education and infrastructure initiatives that are key to helping their populations emerge from poverty, the World Bank warned on Wednesday.In its latest report on international debt, the World Bank said that low- and middle-income countries had paid $443.5 billion toward principal and interest in 2022. That is the highest level in history and a 5 percent increase from 2021. The organization projected that total would rise by nearly 40 percent in 2023 and 2024. The bank estimated that more than half of the world’s low-income countries were facing debt distress and called for their obligations to be restructured to avoid a “lost decade.”“Record debt levels and high interest rates have set many countries on a path to crisis,” said Indermit Gill, the World Bank Group’s chief economist.The World Bank pointed to the variable interest rates on the debt that many developing countries owe and are struggling to repay as a looming threat to their solvency. The bank also noted that the stronger U.S. dollar, which has made those countries’ currencies worth less on global markets, has been making repayment more costly.Governments have defaulted on their debts 18 times in the last three years, including in places like Zambia, Sri Lanka and Lebanon. That surpasses the total number of defaults that were recorded in the previous two decades, underscoring how unsustainable debt burdens have become.The predicament has also made it more difficult for developing countries to attract new investment and financing. According to the World Bank, new loan commitments to developing countries declined by 23 percent last year to $371 billion. It was the first time since 2015 that private creditors had received more money than they invested in developing countries.The mounting debt burdens have put additional pressure on multilateral development institutions such as the World Bank to provide low-cost loans to poor countries. International coalitions such as the Group of 20 have also been pushing to accelerate debt relief, but those efforts have been moving slowly.China, the world’s largest creditor, has faced criticism for being an obstacle to debt restructuring agreements because of its reluctance to assume losses on its loans. Earlier this year, China reached an agreement in principle with Zambia to restructure $4 billion in debt, but the deal has not been finalized amid lingering objections about concessions from some of its creditors.Sri Lanka, which declared bankruptcy last year, is also working on a restructuring package with creditors including China, Japan and India.With rich countries facing their own high debt burdens and global economic growth remaining sluggish, relief for developing economies could continue to be elusive.Treasury Secretary Janet L. Yellen said at a Wall Street Journal CEO Council event on Wednesday that debt relief was one of the most important issues that the U.S. and China needed to work together to address, and that it was a regular subject of discussion with her Chinese counterparts.“A lot of countries around the world are really suffering, especially with high interest rates from unsustainable debt burdens,” Ms. Yellen said. “They need to restructure their debt and we need to cooperate to do it.” More

Inflation declined to 2.4% in November and core inflation also has gone down.
Money markets are currently pricing in almost 150 basis points of rate cuts next year. 
The bank’s key deposit rate is at a record high of 4%, after 10 consecutive hikes that began in July 2022 and pushed rates back into positive territory for the first time since 2011.

Christine Lagarde, president of the European Central Bank (ECB).
Bloomberg | Bloomberg | Getty Images

FRANKFURT — The European Central Bank meets this week with investors closely monitoring to see when the Frankfurt institution might start to cut interest rates.
It will be too early to declare victory in the battle against inflation, but with inflation at a two-year low, it certainly gives the ECB’s Governing Council breathing space to focus on another important issue: its gigantic balance sheet.

“Having reached its policy rate plateau at a 4% deposit rate, the ECB can now shrink its balance sheet at a faster pace without risking too much of a blowout in yield spreads within the euro zone,” said Holger Schmieding of Berenberg in a research note to clients.
“Nonetheless, markets will probably have to correct some of their overoptimistic rate cut expectations once the ECB has spoken this Thursday.”

Inflation plunge

Inflation declined to 2.4% in November and core inflation also has gone down. With inflation falling faster than expected, investors have increased their bets for ECB rate cuts next year, especially after one of the more hawkish members of the board, Isabel Schnabel, called the consume price slowdown “remarkable” and “a pleasant surprise,” according to a transcript of a Dec. 1 interview with Reuters.

Money markets are currently pricing in almost 150 basis points of rate cuts next year. The bank’s key deposit rate is at a record high of 4%, after 10 consecutive hikes that began in July 2022 and pushed rates back into positive territory for the first time since 2011.
“The risk is now earlier and larger cuts, and an ECB more capable of decoupling from the Fed,” said Mark Wall, an ECB watcher with Deutsche Bank.

But he believes the ECB will most likely keep its cards close to its chest: “We expect the ECB to keep the guidance that maintaining restrictive rates for sufficiently long will bring inflation back to target in a timely manner.”

PEPP roll-off

Looking ahead, there will be a new round of staff projections for inflation and economic growth in March, which will give the central bank more data to back their data-dependent policy approach and possibly give it room for rate cuts.
But this week, the main policy change at the conclusion of the ECB’s meeting on Thursday might come in the form of a shift in forward guidance — specifically when it will end reinvestments of its PEPP program.
The PEPP, or the Pandemic Emergency Purchase Program, is a flexible bond purchase program introduced during the coronavirus pandemic. The ECB reinvests any maturing securities it gets from its PEPP portfolio but that could soon change. 

“We have indicated that we would continue reinvesting until at least 2024,” ECB President Christine Lagarde told European Parliament lawmakers on Nov. 27.
“This is a matter which will come probably for discussion and consideration within the Governing Council in the not-too-distant future, and we will reexamine possibly this proposal.”
Deutsche Bank’s Wall explained that “if rate cuts are moving forward, the ECB might accelerate the preliminary steps in the exit from PEPP reinvestments.” More

Federal Reserve officials are widely expected to leave interest rates unchanged, but economists will watch for hints at what’s next.Federal Reserve officials will wrap up a year of aggressive inflation fighting on Wednesday afternoon, when they are expected to use their final policy decision of 2023 to leave interest rates at their highest level in 22 years.The Fed is finishing the year on pause after the most intense campaign of interest rate increases in decades, one meant to snuff out the rapid price gains that have been bedeviling consumers since 2021.Because inflation has now moderated substantially, central bankers have increasingly signaled that they may be done raising borrowing costs, which are set to a range of 5.25 to 5.5 percent. The question investors will be focused on Wednesday is how much rates are expected to come down in 2024 — and when those cuts might begin.The Fed will release its statement and a fresh set of quarterly economic projections at 2 p.m., followed by a news conference with Jerome H. Powell, the Fed chair, at 2:30 p.m. Here’s what to watch.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

A bipartisan report recommended stripping China of the low tariffs the United States granted it two decades ago, among other actions.Bipartisan lawmakers on Tuesday called for severing more of America’s economic and financial ties with China, including revoking the low tariff rates that the United States granted Beijing after it joined the World Trade Organization more than two decades ago.The House Select Committee on the Chinese Communist Party released a wide-ranging set of recommendations for resetting America’s economic relationship with China. The report, which was signed by both House Democrats and Republicans, argued that China had carried out a “multidecade campaign of economic aggression” that had undercut American firms, dominated crucial global industries and left the United States highly vulnerable in the event of a broader military conflict.The 53-page report included nearly 150 recommendations that Congress and the administration could take to offset those vulnerabilities. They ranged from imposing new tariffs on older types of Chinese chips to further cutting off the flow of capital and technology between the world’s largest economies.Among the report’s other recommendations were requiring that publicly traded American companies disclose ties to China and investing further in U.S. research and manufacturing capacity to counter China’s dominance of sectors like pharmaceuticals and critical minerals. It also suggested developing plans to coordinate economically with allies if the Chinese government invades Taiwan.Many of the recommendations may never be adopted by a fractious Congress. But the report could provide a path toward some bipartisan legislation on China in the months to come.Representative Mike Gallagher, Republican of Wisconsin and the committee’s chairman, said in an interview that he would like to see Congress come together on a major China bill next year ahead of the presidential election. He said that while some American firms opposed restrictions on doing business with China — a large and growing market — legislation clarifying what was allowed would be beneficial for many companies.“If Congress doesn’t step up and do something legislatively,” Mr. Gallagher said, “we’re just going to bounce back and forth between different executive orders that have wildly different rules that create chaos for Wall Street and the market.”The report is a tangible sign of how much the bipartisan consensus toward China has shifted in recent years.The most prevalent argument a decade ago was that economic interdependence between the United States and China would be a force for peace and stability. Some — including Biden administration officials — still say that business ties can help stabilize the relationship and promote peace.But that theory has increasingly given way to fears that ties to China could be weaponized in the event of a conflict. It could be catastrophic for the U.S. economy or the military, for example, if the Chinese government cut off its shipments to the United States of pharmaceuticals, minerals or components for weapons systems.Beijing’s subsidization of Chinese firms and incidents of intellectual property theft have also become an increasing source of friction. In some cases, China has allowed foreign firms to operate in the country only if they form partnerships that transfer valuable technology to local companies.The report said that the United States had never before faced a geopolitical adversary with which it was so economically interconnected, and that the full extent of the risk of relying on a strategic competitor remained unknown. The country lacks a contingency plan in the case of further conflict, it said.“Addressing this novel contest will require a fundamental re-evaluation of U.S. policy towards economic engagement with the P.R.C. as well as new tools to address the P.R.C.’s campaign of economic aggression,” the report said, using the abbreviation for the People’s Republic of China.This year, the committee hosted a tabletop exercise to simulate how the United States would respond if the Chinese government invaded Taiwan. It found that U.S. efforts to deter China through sanctions and financial punishment “could carry tremendous costs to the United States,” the report said.The lawmakers said that they did not advocate a full “decoupling” of the U.S. and Chinese economies, but that the country needed to find a way to reduce Beijing’s leverage and to make the United States more economically independent.The report includes a variety of other recommendations, including increasing the authority of a committee that reviews foreign investments for national security threats and devising new high-standard trade agreements, especially with Taiwan, Japan and Britain.But the report’s first recommendation, and perhaps its most significant, is phasing in a new set of tariffs for China over a short period of time.When China joined the World Trade Organization in 2001, the United States and other members began offering China lower tariffs to encourage trade. In return, China started undertaking a series of reforms to bring its economy in line with the organization’s rules.But the report argued that China had consistently failed to make good on those promised reforms, and that the “permanent normal trade relations” the United States had granted to China after its W.T.O. succession did not lead to the benefits or economic reforms Congress had expected. The report said Congress should now apply a different, higher set of tariffs to China.Such a move has been debated by lawmakers, and has been backed by former President Donald J. Trump and other Republican candidates. Last year, Congress voted to revoke permanent normal trade relations with Russia after its invasion of Ukraine.But increasing tariffs on China, one of the United States’ largest trading partners, would provoke more opposition from businesses, since it would raise costs for products imported from China and most likely slow economic growth.The United States already has significant tariffs on many Chinese products, which were imposed during the Trump administration’s trade war and President Biden is still reviewing. The further changes suggested by Congress would increase levies on other items, like toys and smartphones, that have not born additional taxes.A study published by Oxford Economics in November and commissioned by the U.S. China Business Council estimated that such tariffs alone would lead to a $1.6 trillion loss for the U.S. economy over a five-year horizon. It would also be likely to cause further friction at the World Trade Organization, where the group’s most steadfast supporters have already accused the United States of undermining its rules.Liu Pengyu, a spokesman for the Chinese Embassy, said that the U.S.-China economic relationship was “mutually beneficial” and that the proposals would “serve no one’s interests.”The report runs counter to “the principles of market economy and fair competition, and will undermine the international economic and trading order and destabilize global industrial and supply chains,” he said.The Retail Industry Leaders Association, a trade group that includes Target, Home Depot and Dollar General, said in a statement on Tuesday that it was concerned about the recommendations. Raising tariffs on Chinese products would “only harm U.S. businesses and invite retaliation from China,” it said.The lawmakers’ report acknowledged that such a change would be an economic burden, and suggested that Congress consider additional appropriations for farmers and other support for workers.Mr. Gallagher said that extricating the United States from its “thorough economic entanglement” with China would not be easy, and that Washington should work to develop alternative markets and prepare for potential retaliation from Beijing.Reaching consensus on the report required months of negotiations between Democrats and Republicans, which its authors said should send a message to China. Only one member of the 24-person committee voted against the report: Representative Jake Auchincloss, a Massachusetts Democrat who had concerns about protectionism.“One of the theories that the C.C.P. has about the United States is that we are divided, that we are tribal, that we are incapable of coming together to deal with challenges,” said Representative Raja Krishnamoorthi of Illinois, the committee’s top Democrat, referring to the Chinese Communist Party. “On this particular issue of competition between the United States and the C.C.P., we are of one mind.” More

The pledge is unprecedented for Big Tech and makes it easier for roughly 100,000 workers to unionize.Punctuating a year of major gains for organized labor, Microsoft has announced that it will stay neutral if any group of U.S.-based workers seeks to unionize.Roughly 100,000 workers would be eligible to unionize under the framework, which was disclosed Monday by Microsoft’s president, Brad Smith, and the A.F.L.-C.I.O. president, Liz Shuler, during a forum at the labor federation’s headquarters in Washington.The deal effectively broadens a neutrality agreement between Microsoft and a large union, the Communications Workers of America, under which hundreds of the company’s video game workers unionized early this year without a formal National Labor Relations Board election. Officially, it provides a framework in which any group of Microsoft workers can negotiate their own neutrality agreements with similar terms.As part of Monday’s announcement, Microsoft and the A.F.L.-C.I.O. said they would collaborate to resolve issues that arise from the adoption of artificial intelligence in the workplace.Mr. Smith and Ms. Shuler said the partnership would include meetings in which artificial intelligence experts from Microsoft brief labor leaders and workers on developments in the field. Microsoft’s experts will also seek input from workers so they can develop technology in a way that addresses their concerns, such as the risk of job elimination.The two sides said they would work together to help enact policies that would prepare workers for jobs that incorporate artificial intelligence.“Never before in the history of these American tech giants, dating back 50 years or so ago, has one of these companies made a broad commitment to labor rights,” Ms. Shuler said at the forum. “It is historic. Not only have they made a commitment, they formalized it and put it in writing.”Liz Shuler, president of A.F.L.-C.I.O., noted polling that found widespread concern among workers about losing their jobs because of artificial intelligence.Susan Walsh/Associated PressWorkers’ anxiety over artificial intelligence appears to have grown over the past few years. Hollywood writers and actors cited concerns about A.I. as a key reason for their monthslong strikes this year, while Ms. Shuler pointed to recent polling showing widespread concern among workers that artificial intelligence could cost them their jobs.“I can’t sit here and say it will never displace a job,” Mr. Smith said at the forum, alluding to artificial intelligence. “I don’t think that would be honest.” But he added that “the key is to try to use it to make jobs better,” saying the technology could eliminate tasks that people consider tedious.The unveiling of the A.I. initiative comes a few weeks after the board of the start-up OpenAI, which makes ChatGPT, fired the company’s chief executive, Sam Altman, only to accept his reinstatement days later. The episode added to widespread concerns over how to ensure that companies develop and deploy artificial intelligence safely.Microsoft is OpenAI’s biggest investor and played a role in reinstating Mr. Altman.Asked if the OpenAI controversy was an impetus for the new partnership with organized labor, Mr. Smith demurred and said the labor initiative had been in the works for months.“I wouldn’t say what happened in the board room at OpenAI changed it,” he said in an interview after Monday’s forum. “But it raised questions about how A.I. is governed and perhaps it gave even more credence to the kind of partnership we’re announcing today.”When Microsoft announced a neutrality agreement with the communications workers union in June 2022, the offer was conditional: The company was in the process of acquiring the video game maker Activision Blizzard for nearly $70 billion. Microsoft pledged to stay neutral in union elections at Activision if the acquisition succeeded. (The acquisition has since been completed.)The key to artificial intelligence, said Brad Smith, Microsoft’s president, is “to try to use it to make jobs better.”Michael A. McCoy for The New York TimesA few months later, when roughly 300 workers sought to unionize at ZeniMax Media, a video game company owned by Microsoft, Microsoft agreed to abide by the neutrality agreement in that case as well. The agreement allowed them to indicate their preference for a union either by signing authorization cards or anonymously through an electronic platform, a more efficient process than an N.L.R.B. election.The 300 employees unionized — a rarity in Big Tech — and are negotiating a labor contract that includes language restricting the use of A.I. in their workplace.The Communications Workers of America is one of several dozen unions affiliated with the A.F.L.-C.I.O., the country’s largest labor federation. After the ZeniMax campaign, communications union officials believed that Microsoft would probably agree to stay neutral if the union sought to organize workers elsewhere at the company. But Microsoft had never explicitly agreed to do so beyond Activision or ZeniMax. More

Consumer prices rose 3.1 percent in the year through November, and a closely watched core index was roughly the same rate as the previous month.Inflation data released on Tuesday showed that price increases remained moderate in November, the latest sign that inflation has cooled substantially from its June 2022 peak. That’s likely to keep the Federal Reserve on track to leave interest rates unchanged at its final meeting of the year, which takes place this week.The Consumer Price Index came out just hours before the Fed began its two-day gathering, which will conclude with the release of an interest rate decision and a fresh set of quarterly economic projections at 2 p.m. on Wednesday. Jerome H. Powell, the Fed chair, is then scheduled to hold a news conference.Central bankers have embraced a recent slowdown in price increases, and Tuesday’s data largely suggested that inflation remains lower than earlier this year. Overall inflation climbed 0.1 percent on a monthly basis, making for a 3.1 percent increase compared to a year earlier.That was cooler than 3.2 percent in October, and it is down notably from a peak above 9 percent in the summer of 2022.But some of the report’s underlying details could keep Fed officials wary as they contemplate what to do next with interest rates. Investors expect central bankers to begin lowering borrowing costs within the first half of 2024, though officials have been trying to keep their options open.After stripping out volatile food and fuel to give a clearer sense of underlying inflation trends, so-called core inflation climbed more quickly on a monthly basis. And a closely watched measure that tracks housing expenses also climbed more quickly; that measure is called “owners’ equivalent rent” because it estimates how much it would cost someone to rent a home that they own, and economists have been expecting it to decline.“It reinforces this idea that it’s going to be a bumpy road to disinflation,” said Blerina Uruci, chief U.S. economist at T. Rowe Price. “The Fed cannot cut interest rates too soon in the face of resilient services inflation.”Core inflation was up by 4 percent compared to a year earlier, holding steady from October. That pace remains well above the roughly 2 percent pace that was normal before the onset of the pandemic. More